.png){kind=small}
How debt consolidation works
Debt consolidation typically involves combining several existing debts into a single new loan, often with the aim of simplifying repayments and improving cash flow.
At Clear My Debts, we don’t rush you into a solution. Instead, we help you understand how consolidation works, whether it may be suitable for your situation, and how it compares to other available options.
For some people, consolidation can help simplify repayments. For others, it may increase long-term costs or fail to address the underlying financial pressure. Our role is to help you understand the difference before you commit.
What we help you with
We support you by helping you clearly assess whether debt consolidation makes sense — and what alternatives may be more appropriate.
- Reviewing your existing debts, balances, and interest rates
- Explaining how consolidation loans typically work
- Helping you understand eligibility considerations and risks
- Comparing consolidation with non-lending alternatives
- Supporting you to make an informed, pressure-free decision
Our focus is on clarity and suitability, not pushing a product.
Potential benefits
- Fewer repayments to manage
- A single repayment schedule
- Improved short-term cash flow in some cases
- Structure and simplicity for budgeting
Important considerations
- Consolidation does not reduce the total debt owed
- Longer loan terms may increase total interest paid
- Approval often depends on credit history and income stability
- New debt can accumulate if spending habits don’t change
We make sure you understand both sides before proceeding.
Alternatives you may want to consider
Debt consolidation isn’t the only path forward. Depending on your situation, other options may provide more meaningful relief:
- Informal payment arrangements — flexible repayments negotiated with creditors
- Debt negotiation — discussing revised terms or settlements
- Formal debt agreements (Part IX) — structured, legally binding alternatives
We help you understand all relevant options, not just one.
Who this service may suit
This guidance may be helpful if you:
- Are managing multiple unsecured debts
- Feel overwhelmed by different repayment dates
- Are exploring consolidation but unsure if you qualify
- Want to avoid making a costly or rushed decision
- Prefer understanding all options before committing